Title 23. Premium Financing — Subtitle 3. Premium Finance Agreements; Charges and Fees
Statutes in effect as of October 1, 2026.
Md. Code Ann., Ins. § 23-301 (2026)
Title 23. Premium Financing
Subtitle 3. Premium Finance Agreements; Charges and Fees
§ 23–301LinkCopy Citation
(a)
(1)
A premium finance agreement shall be dated and signed by or on behalf of the insured.
(2)
Except as provided under subsection (b)(5)(viii) of this section, the printed part of the premium finance agreement shall be in approximately 8–point type and be easily readable by an average individual.
(b)
A premium finance agreement shall contain:
(1)
the name and place of business of the insurance producer negotiating the related insurance contract;
(2)
the name and residence or place of business of the insured as specified by the insured;
(3)
the name and place of business of the premium finance company to which payments may be made;
(4)
an itemized list for each insurance contract or coverage financed under the premium finance agreement that includes:
(i)
the applicable application number, binder number, or policy number;
(ii)
the effective date of the insurance contract or coverage;
(iii)
the name of the company issuing the insurance contract or coverage; and
(iv)
the premium for the insurance contract or coverage; and
(5)
if applicable, the following items:
(i)
the total amount of the premiums;
(ii)
the amount of the down payment;
(iii)
the principal balance (the difference between items (i) and (ii) of this item);
(iv)
the amount of the finance charge;
(v)
the balance payable by the insured (the sum of items (iii) and (iv) of this item);
(vi)
the number of installments required, the amount of each installment expressed in dollars, and the due date or period of each installment;
(vii)
the electronic payment fee; and
(viii)
in at least 12–point type, the following statement: “If this agreement is canceled or the loan is prepaid in full before the end of its term, the actuarial method will be used to calculate the earned finance charge. Under this method, most of the finance charge is earned in the early months of the loan term rather than equally in each month. You may request a sample illustration of how the finance charge is earned.”.
(c)
(1)
The items set out in subsection (b)(5) of this section need not be stated in the sequence in which they appear.
(2)
Additional items may be included to explain the computations made in determining the amount to be paid by the insured.
(3)
With respect to commercial automobile, fire, or liability insurance, a premium finance agreement may include separate provisions requiring representations, warranties, or other obligations of the insurance producer who sells, solicits, or negotiates the insurance policy, the premiums for which are financed under the premium finance agreement.
(d)
A premium finance agreement may provide for additional insurance premiums to be financed and added to the initial premium finance agreement.
(e)
Subject to §§ 23–501.1 and 23–505.2 of this title, a premium finance agreement may include monthly payments for the purchase price of a motor club service contract.
Md. Code Ann., Ins. § 23-301.1 (2026)
Title 23. Premium Financing
Subtitle 3. Premium Finance Agreements; Charges and Fees
§ 23–301.1LinkCopy Citation
In addition to financing the premium of a surplus lines insurance contract, a premium finance agreement may include any:
(1)
premium receipts tax that a surplus lines broker is required to charge under § 3-324 of this article and pay to the Commissioner under § 3-325 of this article;
(2)
policy fee that a surplus lines broker is allowed to charge under § 27-216 of this article; and
(3)
inspection fee that a surplus lines broker is allowed to charge under § 27-216 of this article.
Md. Code Ann., Ins. § 23-301.2 (2026)
Title 23. Premium Financing
Subtitle 3. Premium Finance Agreements; Charges and Fees
§ 23–301.2LinkCopy Citation
(a)
(1)
With respect to private passenger motor vehicle insurance and personal insurance, a premium finance company may:
(i)
assign all rights and obligations under a premium finance agreement to another premium finance company that is registered in the State under this title; or
(ii)
pledge a premium finance agreement as collateral for a loan.
(2)
If a premium finance company assigns the obligation to service a premium finance agreement to another premium finance company under paragraph (1)(i) of this subsection, the assigning premium finance company shall notify the insured in accordance with subsection (c) of this section:
(i)
that the obligation to service the premium finance agreement has been assigned to another premium finance company that is registered in the State under this title; and
(ii)
of the name, address, and telephone number of the premium finance company to which the obligation has been assigned.
(b)
(1)
With respect to commercial automobile, fire, or liability insurance, a premium finance company:
(i)
except as provided in paragraph (2) of this subsection, may assign all rights and obligations under a premium finance agreement to another person if the premium finance agreement expressly confers the right to assign all rights and obligations under the premium finance agreement; or
(ii)
may pledge a premium finance agreement as collateral for a loan.
(2)
A premium finance company that assigns rights and obligations under paragraph (1)(i) of this subsection shall:
(i)
retain the obligation to service the premium finance agreement; or
(ii)
assign the obligation to service the premium finance agreement to another premium finance company that is registered in the State under this title.
(3)
If a premium finance company assigns the obligation to service a premium finance agreement to another premium finance company under paragraph (2)(ii) of this subsection, the assigning premium finance company shall notify the insured in accordance with subsection (c) of this section:
(i)
that the obligation to service the premium finance agreement has been assigned to another premium finance company that is registered in the State under this title; and
(ii)
of the name, address, and telephone number of the premium finance company to which the obligation has been assigned.
(c)
A notice required under subsection (a)(2) or (b)(3) of this section shall be by:
(1)
first–class mail; or
(2)
if the premium finance company meets the requirements for delivering a notice under § 27–601.2 of this article, electronic means.
Md. Code Ann., Ins. § 23-302 (2026)
Title 23. Premium Financing
Subtitle 3. Premium Finance Agreements; Charges and Fees
§ 23–302LinkCopy Citation
(a)
A copy of each premium finance agreement or other notice of a premium finance agreement that describes the policy or policies involved shall be given to the agency issuing the policy or policies or to the insurers involved.
(b)
(1)
If a policy is procured through a surplus lines broker licensed in the State, and payment is not made directly to the surplus lines broker or the insurer, a copy of the premium finance agreement or other notice of the premium finance agreement shall be sent to the surplus lines broker by the insurance producer or premium finance company.
(2)
A premium finance company may require an insurance producer who procures premium financing to:
(i)
send to the surplus lines broker the notice required under paragraph (1) of this subsection within 10 business days of the execution of a premium finance agreement; and
(ii)
provide to the premium finance company, within 10 business days of receipt of a policy, the insurer’s name, policy number, and any other information necessary to complete a premium finance agreement.
(c)
When a premium finance agreement is signed, the premium finance company, or the insurance producer, if applicable, shall provide the insured with, or cause the insured to be provided with, a legible copy of the fully completed and executed premium finance agreement.
Md. Code Ann., Ins. § 23-302.1 (2026)
Title 23. Premium Financing
Subtitle 3. Premium Finance Agreements; Charges and Fees
§ 23–302.1LinkCopy Citation
(a)
An insured may finance an additional premium if:
(1)
the insured has paid the down payment, if any, required by the premium finance company on the additional premium; and
(2)
the premium finance company delivers or mails a written notice to the insured at the last known address of the insured indicating that:
(i)
there is a revised premium finance agreement; and
(ii)
in the event of default in payment of the revised premium finance agreement, the policy may be canceled.
(b)
An insurer may not delay cancellation for the sole purpose of applying premiums on deposit to any additional premium.
Md. Code Ann., Ins. § 23-302.2 (2026)
Title 23. Premium Financing
Subtitle 3. Premium Finance Agreements; Charges and Fees
§ 23–302.2LinkCopy Citation
If an insurer receives notice of a financed insurance premium, the insurer shall, within 10 business days after its calculation, notify the insured, the insurer’s insurance producer, and premium finance company of any additional premium arising under the financed policy.
Md. Code Ann., Ins. § 23-303 (2026)
Title 23. Premium Financing
Subtitle 3. Premium Finance Agreements; Charges and Fees
§ 23–303LinkCopy Citation
(a)
The maximum charges stated in §§ 23-304 and 23-305 of this subtitle shall include all interest, fees, and charges incident to the premium finance agreement and the resulting extension of credit.
(b)
Notwithstanding subsection (a) of this section, delinquency, collection, cancellation, reinstatement, and electronic payment fee charges may be made in accordance with the limitations of §§ 23-306, 23-307, and 23-307.1 of this subtitle.
Md. Code Ann., Ins. § 23-304 (2026)
Title 23. Premium Financing
Subtitle 3. Premium Finance Agreements; Charges and Fees
§ 23–304LinkCopy Citation
(a)
The finance charge shall be computed:
(1)
on the amount of the entire premium loan advanced, including any taxes or fees that are financed under § 23–301.1 of this subtitle, after subtracting any down payment on the premium loan made by the insured;
(2)
from the inception date of the insurance contract or from the due date of the premium, disregarding any grace period or credit allowed for payment of the premium, through the date when the final installment under the premium finance agreement is payable; and
(3)
in an amount not exceeding the sum of 1.15% for each 30 days of the loan, computed in advance.
(b)
(1)
An insured shall receive a refund of a finance charge that exceeds any amount due under the premium finance agreement if:
(i)
the insurance contract is canceled; or
(ii)
the insured prepays the loan in full at any time.
(2)
The amount of the refund under paragraph (1) of this subsection may be calculated by the actuarial method.
(3)
(i)
A finance charge:
(1)
is earned in 30–day increments; and
(2)
in accordance with subparagraph (ii) of this paragraph, may be earned on the first day of each 30–day period.
(ii)
If a finance charge is earned on the first day of each 30–day period, the premium finance agreement shall contain a notification that the finance charge is earned on the first day of each 30–day period.
(4)
A premium finance company may not retain more of the finance charge than is earned under this section.
(c)
With respect to commercial automobile, fire, or liability insurance only, a finance charge may be imposed on any unpaid principal balance of the loan remaining after all unearned premiums have been returned if the unearned premiums are less than the unpaid principal balance due to:
(1)
an audit by the insurer resulting in additional premium;
(2)
the application of a minimum premium on a policy;
(3)
an endorsement that is made after a policy is issued and results in additional premium; or
(4)
a lawful delay in canceling an insurance policy that is beyond the control of the premium finance company.
(d)
Notwithstanding any other provision of law, a premium finance company may not use the Rule of 78s in computing a finance charge under this section.
Md. Code Ann., Ins. § 23-305 (2026)
Title 23. Premium Financing
Subtitle 3. Premium Finance Agreements; Charges and Fees
§ 23–305LinkCopy Citation
(a)
A premium finance company may charge an initial service fee, which may not exceed $20, for actual expenses.
(b)
The initial service fee may not be refunded on cancellation or repayment.
Md. Code Ann., Ins. § 23-306 (2026)
Title 23. Premium Financing
Subtitle 3. Premium Finance Agreements; Charges and Fees
§ 23–306LinkCopy Citation
(a)
A premium finance agreement may require the insured to pay a delinquency and collection charge on each installment that is in default for a period of not less than 5 days.
(b)
A delinquency and collection charge shall be at least $1, up to a maximum of 5% of the installment in default, but may not exceed:
(1)
$8, with respect to private passenger automobile or personal fire or liability insurance; and
(2)
$100, with respect to commercial automobile, fire, or liability insurance.
(c)
Only one delinquency and collection charge may be collected on an installment, regardless of the period during which the installment remains in default.
Md. Code Ann., Ins. § 23-307 (2026)
Title 23. Premium Financing
Subtitle 3. Premium Finance Agreements; Charges and Fees
§ 23–307LinkCopy Citation
(a)
Except as provided in subsection (d) of this section, a premium finance agreement may require the insured to pay a cancellation charge if a default in paying an installment results in the cancellation of an insurance contract listed in the premium finance agreement.
(b)
A cancellation charge shall be:
(1)
with respect to private passenger automobile or personal fire or liability insurance, equal to the difference between a delinquency and collection charge imposed under § 23–306 of this subtitle with respect to the installment in default and:
(i)
$15 for a default before or during calendar year 2014;
(ii)
$16 for a default during calendar year 2015;
(iii)
$17 for a default during calendar year 2016;
(iv)
$18 for a default during calendar year 2017;
(v)
$19 for a default during calendar year 2018; and
(vi)
$20 for a default during or after calendar year 2019; and
(2)
with respect to commercial automobile, fire, or liability insurance, 5% of the installment, not to exceed an amount equal to the difference between a delinquency and collection charge imposed under § 23–306 of this subtitle with respect to the installment in default and $100.
(c)
A premium finance company may require the payment of a reinstatement charge that is in place of and in the same amount as the cancellation charge if, after a cancellation charge is imposed in accordance with the requirements of subsection (d) of this section, the insured pays the defaulted installment.
(d)
A premium finance agreement may impose a cancellation charge:
(1)
on or after the effective date stated in the notice of cancellation issued to the insurer under § 23–403 of this title; or
(2)
on or after the cancellation effective date stated in the notice of intent to cancel delivered or mailed to the insured under § 23–402 of this title, if:
(i)
the premium finance company has notified the insured in the notice of intent to cancel that a cancellation fee will be imposed on the cancellation effective date stated in the notice of intent to cancel; and
(ii)
the notice of intent to cancel includes the following statement in 12–point or larger type: “If you do not pay the delinquent amount before the cancellation effective date stated in this notice, at any time within 30 days of the cancellation effective date, your insurance policy is subject to cancellation on the cancellation effective date. This means that if you have a loss on or after the cancellation effective date stated in this notice, you may not have coverage for the loss.”.
Md. Code Ann., Ins. § 23-307.1 (2026)
Title 23. Premium Financing
Subtitle 3. Premium Finance Agreements; Charges and Fees
§ 23–307.1LinkCopy Citation
(a)
(1)
In this section the following words have the meanings indicated.
(2)
(i)
“Electronic check” means a form of payment in which a fund transfer is made electronically from a payer’s bank account to a premium finance company’s bank account.
(ii)
“Electronic check” does not include a written check that is delivered to a premium finance company or an agent by hand delivery, regular mail, or other form of personal delivery.
(3)
“Electronic payment” includes payment by credit card, debit card, or electronic check.
(b)
A premium finance agreement may require the insured to pay an electronic payment fee if the insured elects to pay a premium finance company by means of an electronic payment.
(c)
A premium finance company may charge an electronic payment fee, which may not exceed $8, for actual expenses incurred by the premium finance company for the electronic payment.
Md. Code Ann., Ins. § 23-308 (2026)
Title 23. Premium Financing
Subtitle 3. Premium Finance Agreements; Charges and Fees
§ 23–308LinkCopy Citation
A premium finance company may charge a dishonored check fee, which may not exceed $25, for actual expenses incurred in the processing of a dishonored check.
Md. Code Ann., Ins. § 23-309 (2026)
Title 23. Premium Financing
Subtitle 3. Premium Finance Agreements; Charges and Fees
§ 23–309LinkCopy Citation
A premium finance company may not charge an insured or a prospective insured any fee for the expense that the premium finance company incurs in obtaining a comprehensive loss underwriting exchange automobile report (CLUE report) regarding the insured or prospective insured if a producer already has charged the insured or prospective insured for obtaining the report.
Md. Code Ann., Ins. § 23-310 (2026)
Title 23. Premium Financing
Subtitle 3. Premium Finance Agreements; Charges and Fees
§ 23–310LinkCopy Citation
Filing of a premium finance agreement is not needed to perfect the validity of the premium finance agreement as a secured transaction as against creditors, subsequent purchasers, pledgees, encumbrancers, trustees in bankruptcy or any other insolvency proceeding under any law, or anyone having the status or power of any of those persons, their successors, or assigns.
Md. Code Ann., Ins. § 23-311 (2026)
Title 23. Premium Financing
Subtitle 3. Premium Finance Agreements; Charges and Fees
§ 23–311LinkCopy Citation
A premium finance company is not required to reinstate a policy if:
(1)
the insurer requires a reinstatement fee, as authorized under § 27–216(b)(5) of this article, to be paid by the insured; and
(2)
the insured does not timely pay the reinstatement fee.